Limited Liability Partnership in Russia

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

According to the Civil Code in force in the Russian Federation, among commercial organizations, the authorized capital and the result of which is divided into shares, there are four types of business entities. The first group includes limited and general partnerships. Their participants can be both individual entrepreneurs and individual commercial organizations, but not ordinary citizens, i.e. individuals. The second group under the legislation of the Russian Federation includes joint-stock companies, partnerships with limited and additional liability. Their founders can be both legal entities and individuals, i.e. ordinary Russian citizens. In some cases, the legislation restricts the participation of certain categories in various forms of commercial organizations with equity share capital.

General information

According to the definition contained in Article 87 of the Civil Code of the Russian Federation, a limited liability partnership is a type of business company with an authorized capital divided into shares owned by its participants, within which they are liable for the obligations arising from the activities and risks. At the same time, founders who have not fully paid their parts are jointly and severally liable within their limits.

The corporate name of this form of commercial organization must necessarily include the phrase "limited liability company" (LLC). Not only free cash resources, but also securities, as well as property rights, which are evaluated by an independent expert, can be invested in the authorized capital. A limited liability partnership in Russia operates in accordance with the Civil Code and Federal Law No. 14-FZ, as well as other regulatory legal acts.

Number and types of participants

According to the aforementioned federal law, a limited liability partnership may include from one to fifty participants. Another economic company cannot be the sole founder. If the number of participants exceeds the established limit, then such a company must be transformed into a joint-stock company. Otherwise, it may be liquidated in court at the request of other legal entities or state bodies.

Bin the event of a gross violation of his duties or obstruction of the activities of the partnership, the participant may be expelled from it in a judicial proceeding. In general, both citizens of the Russian Federation and legal entities, including other business entities, can act as founders.

Creation of a Limited Liability Partnership

In accordance with Article 89 of the Civil Code of the Russian Federation, the beginning of this type of commercial organization is associated with a meeting of founders who decide on the form of their joint activities. If a partnership is established by one person, it is accepted individually. The decision to establish a limited liability company must necessarily contain a vote on the following issues:

• Approval of the charter (the main document of the LLC).
• Election of governing bodies.
• Appointment of an auditor or audit committee.

After that, the founders conclude an agreement in writing on the implementation of their joint activities, which defines all the fundamental issues of the company's work. It indicates the share of each of the participants and the procedure for its payment. In the case of a sole creation of a limited liability company, this information must contain the initial individual decision.

Charter of a Limited Liability Partnership

The agreement and the agreed decision on the creation of such a form of a business entity are not founding documents. However, they containinformation on the nominal value and size of shares is included in the unified state register of legal entities during registration.

A limited liability partnership must necessarily have a charter, which includes the following items (Article 12 of Federal Law No. 14-FZ):

• brand name (full and abbreviated);
• location information;
• information about the governing bodies of the company, their composition and competence;
• share capital;
• duties and rights of founders;
• the procedure for storing documents and providing them to interested parties.

The question of the necessary changes in this information can be raised exclusively at the general meeting. In case of a positive vote, the relevant state authorities should be informed about them.

Management and competence of individual bodies

A limited liability partnership is strategically managed by a general meeting of founders, tactically by an elected executive body. At the same time, the competence, as well as the procedure for resolving important issues, are clearly regulated by law. The executive management body can be either sole or collegiate, but in any case it is accountable to the general meeting. The competence of the latter includes all fundamental issues:

• amending the charter;
• education of executive bodies;
• profit and loss distribution;
• decision on liquidation or reorganization;
• election of an auditor or audit committee.

All other problems of current activity are within the competence of managers.

Reorganization or liquidation of a company

A limited liability partnership is transformed or terminates its activities by a unanimous decision of its participants at a general meeting. Information about the relevant decision of the founders is transferred to the Unified State Register.

Any member of the company can voluntarily give up his share, while his former colleagues will have the priority right to purchase. Upon withdrawal, he is paid the actual value of his share or property is issued within the time limits established by the charter and legislation of the Russian Federation.